Deck 18: Accounting for Financial Instruments

Question 1

IAS 38 states that a financial asset is derecognized from a statement of financial position only when the contractual rights to the cash flow from this asset expires.

Answer 1

False

Question 2

Which of these qualities of IAS 39 is NOT changed by IFRS 9,phase 1?

A)The existence of held- to- maturity as a category of financial assets
B)Initial recognition of financial assets
C)The existence of loans and receivables as categories of financial assets
D)Methods of calculating impairments

Answer 2

B

Question 3

The EU has adopted IAS 39 in its entirety.

Answer 3

False

Question 4

IAS 32 does not require the accounting of separate parts of a compound financial instrument

Question 5

A financial instrument is a contract which gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity

Question 6

A financial liability is derecognized from a statement of financial position when the specified obligation is discharged,is cancelled or expires.

Question 7

Which of these does not qualify a hedging relationship for hedge accounting?

A)The effectiveness of the hedge can be reliably measured
B)The hedge is expected to be highly effective
C)The change in fair value of the asset or liability is hedged
D)Formal,detailed documentation of the hedge relationship exists,indicating the risk to be hedged,the hedge item and the hedge instrument

Question 8

Which of these is not a defining characteristic of a derivative financial instrument according to the standards?

A)A value dependent upon a specified interest rate or similar variable
B)A newly acquired financial instrument
C)A financial instrument to be settled at a later date
D)A financial instrument that requires little or no initial net investment relative to other similar contracts

Question 9

Which best describes the conditions of insurance risk under IFRS4?

A)At least one of: the possibility of the event; when it will occur or how much needs to be paid if it occurs must be uncertain at the inception of the contract
B)All of: the possibility of the event; when it will occur and how much needs to be paid if it occurs must be uncertain at the inception of the contract
C)At least one of: the possibility of the event; when it will occur; if the premiums will be paid or how much needs to be paid if it occurs must be uncertain at the inception of the contract
D)All of: the possibility of the event; when it will occur; if the premiums will be paid or how much needs to be paid if it occurs must be uncertain at the inception of the contract

Question 10

Which of these is not a category of financial asset under IAS 39?

A)Shares held for trading at fair value through profit or loss
B)A loan to a debtor
C)an asset transferred to a third party but with the option to repurchase
D)Available for sale financial assets